We wouldn't blame Old Dominion Freight Line, Inc. (NASDAQ:ODFL) shareholders if they were a little worried about the fact that David Congdon, the Executive Chairman of the Board recently netted about US$15m selling shares at an average price of US$441. However, that sale only accounted for 0.9% of their holding, so arguably it doesn't say much about their conviction.
Old Dominion Freight Line Insider Transactions Over The Last Year
In fact, the recent sale by Executive Chairman of the Board David Congdon was not their only sale of Old Dominion Freight Line shares this year. They previously made an even bigger sale of -US$15m worth of shares at a price of US$391 per share. That means that even when the share price was below the current price of US$442, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 1.0% of David Congdon's stake.
Insiders in Old Dominion Freight Line didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insider Ownership Of Old Dominion Freight Line
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Old Dominion Freight Line insiders own 11% of the company, currently worth about US$5.0b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Old Dominion Freight Line Insider Transactions Indicate?
Insiders sold Old Dominion Freight Line shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Old Dominion Freight Line. In terms of investment risks, we've identified 1 warning sign with Old Dominion Freight Line and understanding this should be part of your investment process.
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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.